Guidance
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FY2025 Q4
Improving
Brown & Brown, Inc. earnings call
Buzzberg read
Cautiously optimistic about 2026 organic growth
Brown & Brown reported a strong Q4 with significant total revenue growth driven by M&A, but organic growth was negative due to a tough comparison from prior-year flood revenue. Management discusses the impact of falling E&S property rates, rising employee benefits costs, and the competitive threat from a startup broker poaching talent. Q4 total revenues grew 35.7% to $1.6B, but organic revenue decreased 2.8% due to prior-year flood claims processing revenue.
Buzzberg read Cautiously optimistic about 2026 organic growth Brown & Brown reported a strong Q4 with significant total revenue growth driven by M&A, but organic growth was negative due to a tough comparison from prior-year flood revenue. Management discusses the impact of falling E&S property rates, rising employee benefits costs, and the competitive threat from a startup broker poaching talent. Q4 total revenues grew 35.7% to $1.6B, but organic revenue decreased 2.8% due to prior-year flood claims processing revenue. Read full analysisCollapse analysis
Brown & Brown reported a strong Q4 with significant total revenue growth driven by M&A, but organic growth was negative due to a tough comparison from prior-year flood revenue. Management discusses the impact of falling E&S property rates, rising employee benefits costs, and the competitive threat from a startup broker poaching talent. Q4 total revenues grew 35.7% to $1.6B, but organic revenue decreased 2.8% due to prior-year flood claims processing revenue.
- The company completed a record year for M&A, adding ~$1.8B of annual revenue, led by the acquisition of AssuredPartners.
- Management notes increased competition from a startup broker (implied to be Howden) that poached 275 employees and took $23M in known annual revenues.
- Property catastrophe reinsurance rates are declining 15-30%, and some binding authority business is moving back to the admitted market.
Revenue$1.669BReported
EPS$0.93Reported
Gross margin83.82%Reported
Operating margin25.7%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Margins
Raising long-term margin target range to 32-37%
Competition
Startup broker poaches 275, taking $23M revenue
Show 3 more callouts
Pricing
Expect continued moderation in casualty rate increases
Pricing
Expect cap property rates to decline modestly
M&A
Integration of AssuredPartners on track, synergies expected
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $1.669B | Reported |
| EPS | $0.93 | Reported |
| Gross margin | 83.82% | Reported |
| Operating margin | 25.7% | Reported |
| Free cash flow | $0.424B | Reported |
| Capex | $0.02B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Operating margin | FY2026 | 32%–37% | 34.5% | Raised |
AI, capex & demand read
Management read
Measured
Management strikes a balanced, confident tone, acknowledging headwinds like the poaching of teammates and market softening while emphasizing strong cash flow and disciplined execution.
all 3 named companies below
Companiesreturns since call
Supply chain
Supply chain
Powell Brown
Employee benefits pricing for medical and pharmacy costs is rising sharply (medical +7-9%, pharmacy +10%), indicating persistent healthcare cost inflation. — Sustained high medical/pharmacy costs suggests robust pricing power for major health insurers and pharmacy benefit managers (PBMs), potentially supporting their revenue growth.
Evidence
“Pricing for employee benefits increased slightly as compared to prior quarters, with medical costs up 7% to 9% and pharmacy costs up over 10%.”
Supply chain
Andy
Business is moving from the E&S market to the admitted market due to competitive pricing, but the long-term trend still favors more insured assets moving into the E&S space. — Despite cyclical shifts, secular demand for flexible E&S capacity remains strong, benefiting carriers like Chubb that underwrite surplus lines.
Evidence
“we continue to believe that there's going to be more insured assets, though, moving into the ENS space versus moving back into the admitted.”
External signals
Supply-chain alpha · 3returns since call
The decrease in excess & surplus (E&S) property rates is driving some binding authority business to move back into the admitted market, a cyclical shift that could pressure specialty distribution organic growth.
Evidence
“we saw some binding authority business move back into the admitted market.”
Employee benefits pricing for medical and pharmacy costs is rising sharply (medical +7-9%, pharmacy +10%), indicating persistent healthcare cost inflation.
Business is moving from the E&S market to the admitted market due to competitive pricing, but the long-term trend still favors more insured assets moving into the E&S space.
Methodology & coverage
Management-only analysis. All 3 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.